The Affordable Care Act employer update and key considerations during 2017

The Affordable Care Act (ACA): Employer update and key considerations during 2017

March 7, 2017

Page 2 The Affordable Care Act: Employer update and key considerations during 2017

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Disclaimer


How to get RCH creditsFor those with CPP or FPC designations

► RCH credit certificates will be emailed to qualified participants within two weeks of this event

► Be sure you provided the correct email address when you registered for this event

► You must respond “yes” to the RCH polling question that will appear toward the end of this presentation

► You must also respond to all other polling questions during this webcast


Today’s panel

Moderator

Ali Master Ernst & Young LLP National Director Workforce Advisory ServicesDallas, TX

Ernst & Young LLP speakers

Helen Morrison PrincipalNational Tax Compensation and Benefits Washington, D.C.

Heather Meade Principal Washington CouncilErnst & YoungWashington, D.C.

Ann Bradshaw PartnerIndirect Tax ACA ServicesHouston, TX

Today’s agenda

► President Trump’s priorities for 2017 ► Current legislative environment ► Legislative process and key considerations► Administrative implications and latest

guidance for employers ► Employer considerations during 2017

The Affordable Care Act:Employer update and key considerations during 2017March 7, 2017


President Trump’s priorities for 2017

Regulatory reform

Infrastructure

ACA reform

Tax reform

Immigration

On deck

Up to bat

In progress

In progress

Trade

In progress

Early stages


The current legislative environmentReading between the headlines

New York Times House Republicans Unveil Plan to Replace Health LawMarch 7, 2017

Wall Street Journal House GOP Releases Plan to Repeal, Replace ObamacareMarch 7, 2017

US NewsGovernors Disagree on Future of Medicaid Expansion, ObamacareFebruary 27, 2017


Polling question

In your view, how likely is it that significant changes will be made to the employer mandate requirements of the Affordable Care Act in 2017?A. Very likely

B. Somewhat likely

C. Not likely

D. “Snowball’s chance in …”

Today’s agenda

► President Trump’s priorities for 2017 ► Current legislative environment

► Legislative process and key considerations

► Administrative implications and latest guidance for employers

► Employer considerations during 2017


2017 congressional timeline

Jan Feb Mar Apr May Jun Jul Aug Sept

March 15: Federal debt limit reinstated

September 30: Federal Aviation Administration funding, authorization expire

February 28: President addressed joint session of Congress

“Must-do” items for 2017 Government funding beyond April 28, for remainder of FY 2017 and for FY 2018 Federal debt limit: current suspension ends March 15, 2017 Supreme Court nomination and other Administration appointments Federal Aviation Administration (FAA) reauthorization Children’s Health Insurance Program – expires September 30, 2017

January-March: ACA repeal/ replace process proceeds

Late April/May: Tax reform process may begin in House

July 31-September 5: Congress summer recess

April 28: Expiration of government funding

April 7-24: House, Senate spring recess


Repeal and replaceWhat it might look like

Taxes and fees repealed based on House proposed legislation released March 6, 2017 (AHCA)

Individual mandate (penalty reduced to $0 retroactive to January 1, 2016)

Employer mandate (penalty reduced to $0 retroactive to January 1, 2016)

Additional Medicare and Medicare net investment tax on high income taxpayers

Ban on flexible spending accountover-the-counter medical reimbursements

Medical devices Tanning tax Health insurance industry Deduction limit on health insurance

executives’ compensation Prescription pharmaceuticals Health flexible spending account limits

Revenue enhancements and cost savings based on AHCAReduction in Medicaid expenditures Cadillac tax applies beginning 2025



Access to coverage Possible provisions based on AHCA

Premium tax credits/cost sharing ► PTCs to continue thru 2019► New tax credit based on age and income;

advanceable and refundable (in 2020)► Available to those who are not eligible for

employer or government coverage► Expansion of health savings accounts

Insurance marketplaces ► Individual market► Funding for state-run high risk pools

Medicaid coverage ► Medicaid reform capping federal liability► Medicaid expansion continues thru 2019► Funding based per capita

Preexisting conditions ► Premium surcharges (30%) for failure to maintain continuous coverage

Market reform provisions(e.g., Dependent coverage until age 26)

► Not addressed through reconciliation



► Individual insurance marketplace stabilization► Cut back regulations and fees ► Provide for age-based rating relief ► Narrow special enrollment periods

and enhance verification ► Enhance access to coverage and

continuous coverage requirements ► Permit insurance to be sold across

state lines


Polling question

Which potential component of the proposed House repeal and replace provisions would have the most impact on your company?A. Imposition of a Cadillac tax in 2025

B. Repeal of employer mandate requiring offers of coverage for 95% of “full time” employees

C. Repeal of minimum value coverage requirement

D. Change to employer reporting requirements

E. Don’t know, does not apply


Implications for major stakeholders

Individuals States

Employers

Medicaid recipients

Payers

Providers Exchanges

Affordable Care Act


State decisions on Medicaid expansion

CA CO

CT

DC

HI

KY*MD

MA

MN

NV

NY

OR

RI

VT

WA

IA

NM

AL

AK

AZAR

DE

FL

GA

IL IN

ID

KS

LA

ME

MI

MS

MO

MT

NE

NH

NJ

NC

ND

OH

OK

PA

SC

SD

TN

TX

UT

VAWV

WIWY

State not pursuing Medicaid expansion: 19

State expanded Medicaid: 31 + DC

Source: Kaiser Family Foundation, “Status of State Action on the Medicaid Expansion Decision”, as of July 7, 2016*The Governor-elect of Kentucky announced plans to roll back the state’s expansion of Medicaid; however, to date no plans have been finalized.


State activity in light of potential changes to ACA

► Governors speaking out on state impact of ACA replace proposals

► Patterns beginning to emerge► Massachusetts► Vermont► Municipalities

► Analysis of options in light of changes in federal funding► State innovation grants► Medicaid changes► New compliance and reporting needs

Today’s agenda

► President Trump’s priorities for 2017 ► Current legislative environment ► Legislative process and key considerations

► Administrative implications and latest guidance for employers



President Trump’s ACA Executive Order

Key elements► Signed on January 20, 2017,

“Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Appeal”

► Seeks the prompt repeal of the Affordable Care Act

► In the meantime:► Ensure that the ACA is being efficiently

implemented► Take all actions consistent with law to

minimize the unwarranted economic and regulatory burdens of the ACA


Recent IRS developments

► IRS Announcement dated February 15, 2017, revoking new business rule to reject Forms 1040 with blank line 61

► IRS Notice 2016-70 addresses “good faith” transition relief for 2016 reporting and extension of due date for furnishing statements

► IRS Issuing 5699 Notices requesting information from employers whose 2015 Form 1094-C was not received

► IRS FAQ’s updated to indicate that employer shared responsibility assessments for 2015 will be issued beginning in early 2017

► January 9, 2017, IRS Commissioner John Koskinen updated members of Congress on the 2016 tax filings related to Affordable Care Act provisions


Polling question

In light of potential changes to ACA and the timeframe for your company’s 2018 health care benefit program design process, which statement most accurately describes your current process?

A. We are attempting to evaluate the implications of “repeal and replace” but there are too many variables, so 2018 health benefit planning will likely ignore possibilities

B. We are attempting to evaluate implications of “repeal and replace” and expect that we will alter our 2018 health benefit plan design as a result

C. We are waiting to evaluate the implications until there is more clarity around “repeal and replace”

D. Don’t know, does not apply

Today’s agenda

► President Trump’s priorities for 2017 ► Current legislative environment ► Legislative process and key considerations► Administrative implications and latest

guidance for employers



Reporting responsibilities under current law

► Employers must annually compile data and provide every full-time employee with a Form 1095-C as well as provide the IRS on Form 1094-C.

► 2016 reporting deadlines for IRS transmissions are this month and 2017 reporting deadlines begin in January of 2018.

► To date, 2017 reporting obligations have not changed, so employers have generally “stayed the course” with plans that allow them to address current and relevant facets of ACA risk, compliance and reporting, and support of the 95% offer levels, including workforce analysis and audit support.

► New regulatory or legislative changes are possible.


Potential implications for employers as ACA and healthcare reform process continues

► Elimination of employer mandate penalties

► Effect on employer reporting during repeal, replace or transition periods, including the possibility of new state requirements

► Decisions on plan design and coverage for full and part-time employee populations in preparation for new plan year and open enrollment periods

► New valuation, tax and reporting implications for employer if Cadillac tax or cap on the tax exclusion for health care is enacted

► Potential cutback to Medicaid eligibility increasing employee enrollment or uninsured employees


One-minute recap


Polling question

Will you require an RCH certificate for today’s webcast?

Those with CPP or FPC professional designations check “yes” to this question. All others check “no.”

A. Yes

B. No


Questions and answers


Affordable Care ActSee more of our thought leadership

Insights for companies on their ACA journey

Affordable Care Act: IRS compliance and reporting

Perspectives on compliance challenges

Perspectives on the evolving ACA

http://www.ey.com/Publication/vwLUAssets/ey-aca-insights-for-companies-on-their-journey/$FILE/ey-aca-insights-for-companies-on-their-journey.pdf

http://www.ey.com/Publication/vwLUAssets/ey-aca-one-year-retrospective/$FILE/ey-aca-one-year-retrospective.pdf

https://www.youtube.com/watch?v=ids2sMY8ZBQ&list=PLBzcNNo68MDKldS0caYlFXJqtMTbSqhIH&index=2

https://www.youtube.com/watch?v=tTYPwtpj7kM&index=3&list=PLBzcNNo68MDKldS0caYlFXJqtMTbSqhIH


Learn more about US tax reform

► Visit us at ey.com/taxreform to get up-to-date insights on US tax reform proposals and how they impact your business

► Replay information for today’s webcast will be available at the link below:The Affordable Care Act: Employer update and key considerations during 2017

► Replay information for previous tax reform webcasts is available at the links below:US tax reform and ACA: what happens next?Exploring the reconciliation and legislative process

US tax reform: what does it mean for me?Understanding the impact of tax reform on individuals

US tax reform: a border adjusted cash flow tax?Exploring and understanding the proposed shift to a consumption-based tax

US tax reform: impact on state and local taxes and other indirect tax considerations

Understanding the effects of the House Blueprint through modeling and scenario planning

Additional webcasts on 2017 US tax reform and health care reform measures will be scheduled as the situation warrants

► Follow us on twitter at @EY_Tax, @EY_USTaxPolicy and #taxreform

http://www.ey.com/taxreform

http://www.ey.com/gl/en/issues/webcast_2017-03-07-1800_affordable-care-act

http://www.ey.com/gl/en/issues/webcast_2016-12-08-1800_tax-reform-process

http://www.ey.com/gl/en/issues/webcast_2016-12-19-1800_individual-tax-reform

http://www.ey.com/gl/en/issues/webcast_2017-01-05-1800_consumption-based-tax

http://www.ey.com/gl/en/issues/webcast_2017-01-31-1800_us-tax-reform-impact-on-state-and-local-taxes

http://www.ey.com/gl/en/issues/webcast_2017-02-23-1800_modeling-for-tax-reform

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The Affordable Care Act: Employer update and keyconsiderations during 2017

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The Affordable Care Act employer update and key considerations during 2017

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